A highlight from Corruption, Leverage and Cheap Money: Archegos and the Fastest Loss of Wealth in History


These aren't some galaxy brain evil schemes. It's just a lot of people. Fudging the rules just enough acting against their better judgment just enough leaning into greed just enough. It's wong potentially not really letting these brokers know how deep was with each of the others. It's ghosts using instruments that aren't illegal. But which certainly skirt around regulatory intent and it's about banks reversing course to do business with convicted financial criminals because the volume of their trading has just gotten too big to ignore. It's the banality of modern corruption. Welcome back to the breakdown with me. And i'll w it's daily podcast on macro bitcoin and the big picture. Power shifts remaking. Our world the breakdown is sponsored by dot. I l and produced and distributed by coin test. What's going on guys. It is thursday april first and instead you some fun cheesy fake story. I decided to go in the exact opposite direction. Today we're going to be talking about leverage corruption and cheap money the fastest wealth in history. We are talking about arche ghost. This is a story that many of you have been following for coming on a week. Now it is certainly one of the crazier macro stories. I've ever covered here. It involves a traitor with dubious past a group of investment banks coordinating takedown double crossing margin calls and an eraser of fortune. Thanos style tens of billions gone in the seeming. Snap of a finger on the one hand. This is the story of an individual trader. A twenty year icarus who finally flew too close to the sun on the other. It's a story of a market as a whole a market. That is made money. Extraordinarily cheap which normalized extreme risk especially in the form of leverage. Let's start with the man at the center of the story bill. Bill's career started under the tutelage of the legendary hedge fund manager julian robertson in one thousand nine hundred eighty julian robertson founded tiger management. One of the earliest hedge funds. Tigers run is the stuff of legends building from eight million in start up capital in nineteen eighty two over twenty two billion in the late nineteen ninety s when robertson unwound and shutdown the fund. In two thousand. He started the next phase of his career which was investing in the funds of his former employees the so-called tiger cubs to be clear. This isn't like one or two funds. We're talking about thirty five to fifty of the world's top hedge funds rob citron's discovery stephen mandl's lone andreas halvorsen. Viking philippe lafont kuwata management which you may recognize as the lead investor in dapper labs new three hundred and five million dollar round from this week and one of those hedge funds from the tiger cubs was called tighter asia management and came from bill hong hong started as a stock salesman at hyundai securities before hooking up with robertson becoming one of his proteges when tiger was winding down hong spun out his own fund. Tiger asia was a new york-based fund that focused as you might guess on asia at its peak it was managing more than five billion dollars and in general performed well with the notable blip of being on the wrong side of a two thousand eight volkswagen short-squeeze however most people who remember tiger asia. Remember it for its twenty twelve settlement with the sec around insider trading suit in summer of that year it said it planned to wind down return outside capital but a few months later it was clear. Why the firm pled guilty to criminal fraud charges. On december twelfth twenty twelve the

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